Accounting Project Topics

An Assessment of the Impact of Efficient Inventory Management on the Performance of Manufacturing Companies; A Case Study of Guinness Brewery Nigeria Plc

An Assessment of the Impact of Efficient Inventory Management on the Performance of Manufacturing Companies; A Case Study of Guinness Brewery Nigeria Plc

An Assessment of the Impact of Efficient Inventory Management on the Performance of Manufacturing Companies; A Case Study of Guinness Brewery Nigeria Plc

Chapter One


According to Agbonifoh and Yomere (1999) the objectives of a research investigation refers what the study seeks to achieve. This study therefore seeks to achieve the following:

  1. To examine the relationship between average stock and the inventory management of Guinness Nigeria plc.
  2. To ascertain the relationship between annual demand and interest paid and inventory management of Guinness Nigeria plc.
  3. To determine the relationship between annual turnover and inventory management of Guinness Nigeria plc.




The researcher used the indices of profitability and sales turnover to study the various aspect of inventory management which involved procurement and holding cost.


(a) Economic order quantity (EOQ) this is one of the oldest and most popular inventory management method. It lets us know the number of inventory unit you should the number of inventory units you should order to reduce cost based on your company’s holding cost, ordering cost and rate of demand. EOQ is calculated this.

Product Cost

Where: S = Set up (order) cost

D = Demand rate


The assumption of EOQ is that the rate of inventory is constant.

(b) Inventory/Economic production quantity (IPQ): This is a model that spells the number of product your business should order in a single batch in hopes of reducing holding costs and set up cost. The difference between EOQ and IPQ is that, EOQ assumes  suppliers are delivery inventories in full to your customer or business.

The formular is shown below

IPQ =   2KD

H (1-x)

Where k=set up (order) cost

D= Demand Rate

H= Yearly holdig cost per product

X= D/P


The model is good for business who tend to order inventory from suppliers in part rather thanone full order demand is consistent over periods of time.

According to Laurence C. (2019)

The key question inventory management are:

  1. How much inventory should I order?
  2. Where can I cut cost?
  3. Which inventory is selling quickly?
  4. How much deadstock am I carrying
  5. Which inventory is increasing my holding cost.

ABC Model: it is based on the 80/20 preto principle. It focuse on knowing the inventory that bring money and attaches importance to it. ABC Model is used side by side the just-in-time principle.


Inventories management is vital to the successful operation of  business its importance include the following:

  1. Effective inventories enable management to maintain required level of operational independence e.g. obtaining maximum stock levels.
  2. Inventory control provides an effective means of meeting variation in consumer demand and deliveres goods to consumers at right time.
  3. Inventories provide safeguard for unforeseen variation in the delivery of raw materials or goods to be sold to customers.
  4. Effective controlled of inventory system by the purchasing officer, which offered by economic lot of sizes in both purchased and manufactured goods.
  5. Through maintenance of inventories of raw materials and finished goods an organization can run a fairly stable production rate and the reduces expenses and risks associated with labour shortage due to strikes and market condition.
  6. Without effective inventory system and the production schedule or procurement of finished goods to follow demand pattern (seasonal or cyclical) there would be substantial expenses and idle facilities. Upon all these, inventory generates a lot of expenses such as procurement cost, ordering cost, holding cost, stock-out cost and also has some pit falls namely this problems of inadequate levels of inventory under stocking.





This chapter described the design of the study, area of the study, population of the study, sample of the study, instrument for data collection, validation of the instrument, distribution, and receiver of instrument.


The research considered survey design appropriate for the study. the choice of survey design is appropriate since there is need to cover a larger percentage in the study. Moreover the number of the population under study is known. A survey design enables a researcher to take sample from the entire population for a deep analysis (Nwodu, 2006). The researcher administered questionnaire to the respondent


The sources of data can be classified as primary and secondary which have different instrument for collecting related data.


Primary data were sourced and aimed specifically for this project work. They were collected from respondents.

The pools of data were collected through administering of questionnaires.


A close ended questionnaire was designed to be easily understood and ensure validity and reliability of the instrument. The questionnaire is made up of 6 questions each has options of which the respondents were asked to tick good against their selected option.


Secondary data being the one collected from documented past research work and opinion of other authors were equally useful to the accomplishment of this project work.

This of data was in existence before the need to conduct this research was conceived. They were sourced because of their relationship with research topic  mean while I tried to review the opinion and thoughts of another concerning the research topic used information were gathered in relevant text books and publication from the library, as well as journal, newspaper periodical, magazines, and other document. Those documents assisted in literature review and in the analysis of the research problems.


To thoroughly understand the research, personal observation of event was considered to be vital to the research.


Anyanwu (2000) defined data analysis as the conversion of raw data into useable information. The instrument used for data collection in this study was structured questionnaires.


The population of the study comprised the entire population of 150 workers and stakeholders.




This chapter presents the analysis of data collected for the study. The data collected is used to answer the research questions and test the hypothesis.





The study shed light and explained the importance of inventory especially as regards to Guinness Nigeria PLC Lagos. Everybody involved in the organization admitted that inventory is the life blood of an organization.

Inventory is also the firms investment in stock or capital tied up in stock for the facilitation of the activities of the organization as at and when needed. This study found out the following:

  1. That error from inventory procurement staff affects the company’s profitability
  2. It found out also that lack of effective inventory management procedure affects sales turnover negatively
  3. Holding cost affects the company’s profitability.
  4. Ordering cost affect sales turnover.

In this study, an opportunity has been created for existing and prospective business men, employers and employee to benefit from the use of modern inventory control techniques and also enhance the theoretical and practical knowledge of inventory management and control evaluation to the users.


Inventories are maintained to reduce uncertainties and also to reduce total inventory cost. Inventories also contribute substantially to the turnover and profits of an organization.


Those responsible for the management of inventory in any organization should determine the inventory level at which money invested will give the optimal rate of return good inventory management and control help in achieving an organization corporate objectives. It helps to determine when to order, how much to order and how such to maintain as a buffer or safety stock.

To determine the unique attribute and requirement of inventory management and control, a proper analysis of inventory control and management is directly related to profitability and the research is of the view that if the recommendation added in this study is accepted by Guinness Nigeria PLC limited Lagos, efficiency and effectiveness of its operations will be such enhanced.

In view of the analysis and summary of the inventory control and management procedure as practiced at Guinness Nigeria PLC Lagos, and in furtherance of it objectives for keeping the stock which are to satisfy its customers demand in order to achieve the company’s goals and objective of profitably and survival the following recommendation are made:

  1. Firstly, the hotel should redesign its inventory control system in such a way that some holding and ordering cost items like insurance, opportunity cost per order can be included while calculating its economic Quantity, this will go a long way in determining the real optimum inventory to order. It will also help in determining when to make the order and what minimum and maximum stock levels, the stock should hold in storage the stock control procedures should take into consideration on the irregular supply of stock due to transport problems and delays associated with the supply of inventories.

This is a minimum amount of inventory required to prevent dislocation in the production process, to avoid panic buying which could led losses and customer good will.

  1. Secondly, there are sometimes cases of material lost, store and staff stealing. This can be controlled introducing a better system of checking staff when leaving the wharehouse premises after work. At present security men at the gate do not search staff members and cars going out of the wharehouse premises. So security need to be tightened up and uniform closing hours introduced for the different shifts.
  2. And finally, the firm’s accounting system of inventory does not help the firm to improve on efficient stock level.


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